In Spouses Abad vs. Fil-Homes Realty, the Supreme Court addressed the intertwined issues of unlawful detainer and expropriation. The Court ruled that even when expropriation proceedings are underway, a landowner can still pursue an ejectment case against occupants if their possession began through the owner’s tolerance. The decision underscores that tolerance, as a basis for possession, creates an implied promise to vacate upon demand, and failure to do so justifies an ejectment suit, irrespective of ongoing expropriation unless specific legal requirements for suspension are met.

From Tolerance to Tenancy: Can Landowners Eject Occupants Amid Expropriation?

The case revolves around a dispute over two lots in Parañaque City, where the petitioners (occupants) had resided for over 30 years. The respondents, Fil-Homes Realty and Magdiwang Realty, claimed ownership and sought to eject the petitioners, alleging that their occupation was based on mere tolerance since 1980. The occupants countered that their possession was adverse and continuous, and that the respondents’ predecessor-in-interest lacked valid title. During the legal proceedings, the City of Parañaque initiated expropriation proceedings to establish a socialized housing project on the lots, further complicating the matter.

The Metropolitan Trial Court (MeTC) initially ruled in favor of the landowners, ordering the occupants to vacate the premises and pay compensation. However, the Regional Trial Court (RTC) reversed this decision, stating that the case was not an unlawful detainer because there was no tolerance from the start of the possession. The RTC also noted the writ of possession issued in favor of the City of Parañaque as a result of the expropriation proceedings. The Court of Appeals (CA) then reversed the RTC’s decision, siding with the landowners and reinstating the MeTC’s order with modifications, holding that the occupants’ entry without permission indicated tolerance by the respondents’ predecessor-in-interest. The Supreme Court affirmed the appellate court’s decision, clarifying the nuances of possession by tolerance and the impact of expropriation proceedings on ejectment cases.

The Supreme Court emphasized that the essence of unlawful detainer lies in the initial permission granted by the landowner, which creates an implied promise to vacate upon demand. The Court cited Calubayan v. Pascual, highlighting that:

In allowing several years to pass without requiring the occupant to vacate the premises nor filing an action to eject him, plaintiffs have acquiesced to defendant’s possession and use of the premises. It has been held that a person who occupies the land of another at the latter’s tolerance or permission, without any contract between them, is necessarily bound by an implied promise that he will vacate upon demand, failing which a summary action for ejectment is the proper remedy against them.

The Court clarified that even if the respondents did not immediately demand the petitioners’ departure, their initial inaction simply maintained the status quo, allowing the possession by tolerance to continue. Building on this principle, the Supreme Court addressed the impact of the expropriation proceedings, emphasizing that the mere initiation of expropriation and issuance of a writ of possession do not automatically halt ejectment actions. The Court referenced Section 1 of Commonwealth Act No. 538, which outlines the conditions under which ejectment proceedings are automatically suspended:

Section 1. When the Government seeks to acquire, through purchase or expropriation proceedings, lands belonging to any estate or chaplaincy (cappellania), any action for ejectment against the tenants occupying said lands shall be automatically suspended, for such time as may be required by the expropriation proceedings or the necessary negotiations for the purchase of the lands, in which latter case, the period of suspension shall not exceed one year.

However, the Supreme Court underscored that to avail themselves of this suspension, the tenants must either pay the current rents to the landowner or deposit them with the court. Since the petitioners failed to meet either condition, they could not claim the suspension benefit. The Court further explained the stages of expropriation, referencing Lintag v. National Power Corporation:

Expropriation of lands consists of two stages:

The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, “of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint x x x.

The second phase of the eminent domain action is concerned with the determination by the court of “the just compensation for the property sought to be taken.” This is done by the court with the assistance of not more than three (3) commissioners x x x .

The Court emphasized that the expropriation process is incomplete until just compensation is paid, and the issuance of a writ of possession is merely the first step. In the absence of evidence showing judicial deposit in favor of the landowners, the city’s possession of the lots did not equate to a transfer of ownership. In light of these considerations, the Supreme Court upheld the Court of Appeals’ decision, reinforcing the landowners’ right to eject occupants whose possession was based on tolerance, even amidst ongoing expropriation proceedings.

The decision underscores the importance of understanding the nuances of possession by tolerance in ejectment cases. Tolerance implies a permission that, when withdrawn, triggers the occupant’s obligation to vacate. Moreover, the case highlights that while expropriation proceedings aim to transfer property for public use, they do not automatically override existing possessory rights or suspend ejectment actions unless specific legal conditions are met. Landowners retain the right to pursue ejectment until the expropriation is fully completed with the payment of just compensation.

This ruling carries significant practical implications for both landowners and occupants. For landowners, it clarifies that tolerance does not equate to a waiver of their rights to eventually reclaim their property. They can pursue ejectment even after allowing occupation for an extended period, provided they can prove the initial possession was permissive. For occupants, it serves as a reminder that possession by tolerance is precarious and can be terminated at any time, leading to potential eviction. Furthermore, the ongoing expropriation proceedings do not guarantee their right to remain on the property or automatically entitle them to compensation.

The landowners in this case were able to successfully assert their rights because they demonstrated that the occupants’ initial entry onto the property was through their tolerance. Even though they had allowed the occupation to continue for many years, they were able to pursue an ejectment action when they chose to reclaim their property. This case highlights that tolerance does not automatically give rise to ownership or a right to remain on the property indefinitely.

Additionally, the case shows that the initiation of expropriation proceedings does not automatically suspend or terminate an ongoing ejectment action. While expropriation is a powerful tool that allows the government to acquire private property for public use, it does not override existing rights and obligations. In order to suspend an ejectment action, the occupants must comply with the requirements of Commonwealth Act No. 538, such as paying rent to the landowner or depositing it with the court.

In conclusion, Spouses Abad vs. Fil-Homes Realty serves as a vital guide for understanding the interplay between ejectment actions and expropriation proceedings. It underscores the importance of the principle of possession by tolerance and clarifies the conditions under which ejectment actions can proceed even when expropriation is underway. This decision provides clarity for landowners and occupants alike, ensuring that property rights are respected and legal processes are followed in disputes involving possession and eminent domain.

FAQs

What is possession by tolerance?	Possession by tolerance occurs when a landowner allows another person to occupy their property without any contract or agreement, implying that the occupant will vacate upon demand. This permissive use does not grant the occupant any ownership rights.
Can a landowner file an ejectment case if they’ve tolerated occupation for years?	Yes, the Supreme Court has affirmed that a landowner can file an ejectment case even after years of tolerating an occupant, as long as the initial possession was based on permission. The landowner’s inaction does not waive their right to reclaim the property.
What is the effect of expropriation proceedings on an ejectment case?	The initiation of expropriation proceedings does not automatically suspend an ejectment case. Under Commonwealth Act No. 538, suspension requires the occupant to pay rent to the landowner or deposit it with the court.
What are the stages of expropriation?	Expropriation involves two stages: first, determining the government’s authority to exercise eminent domain, and second, determining the just compensation for the property. The process is incomplete until just compensation is paid.
Does the issuance of a writ of possession transfer ownership in expropriation?	No, the issuance of a writ of possession is only the first step in expropriation and does not transfer ownership. Ownership is transferred only upon full payment of just compensation.
What happens if occupants are named beneficiaries in an expropriation ordinance?	Even if occupants are named beneficiaries, it doesn’t automatically grant them rights over the property. They must still meet specific requirements to be considered beneficiaries and be entitled to remain on the land.
What law governs the suspension of ejectment actions during expropriation?	Commonwealth Act No. 538 governs the suspension of ejectment actions when the government seeks to acquire land through purchase or expropriation, provided the tenants pay rent or deposit it with the court.
What is the significance of “just compensation” in expropriation?	“Just compensation” refers to the fair market value of the property at the time of taking, which must be paid to the landowner. Only after this payment is made does ownership of the property transfer to the government.

The Spouses Abad vs. Fil-Homes Realty case provides a clear framework for understanding the rights and obligations of landowners and occupants in situations involving possession by tolerance and expropriation proceedings. It reinforces the importance of adhering to legal procedures and respecting property rights. Understanding this distinction is important in any kind of real estate issues.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Spouses Leticia & Jose Ervin Abad, et al. vs. Fil-Homes Realty and Development Corporation and Magdiwang Realty Corporation, G.R. No. 189239, November 24, 2010